Stein Gets At&t Nod To Build Loop Center

American Telephone & Telegraph Co. confirmed its intent to keep 3,800 jobs in downtown Chicago by tentatively commissioning Stein & Co. to develop a new regional headquarters in the Loop.

AT&T said in a prepared statement Monday that it ``will concentrate negotiations`` with Stein, a Chicago-based development firm, for building a Midwest headquarters on the half-block east of Franklin Street between Adams and Monroe Streets.

Stein was one of three finalists vying for the AT&T lease, which would involve 900,000 square feet of offices and be one of the largest lease transactions in the city`s history.

The developer beat out Tishman Midwest Management Co., which had offered to house AT&T in its Northwestern Atrium Center, under construction at 500 W. Madison St.; and H.M. Walken Co. Inc., which proposed building an annex to its 1 S. Wacker Dr. building, in which AT&T already is a major tenant.

Stein`s $590 million Franklin Street project will be named AT&T Corporate Center. Its first phase will be an office skyscraper of 61 stories and 1.4 million square feet to be started early next year and completed in 1988.

Plans drawn by the Chicago architectural firm of Skidmore, Owings & Merrill call for the second phase to be a 34-story tower containing 830,000 square feet to be started in 1990 and finished in 1993.

AT&T said it expected to take 400,000 to 600,000 square feet in the first tower, beginning in early 1988, and 300,000 to 500,000 square feet in the second tower.

``While there are a great many details yet to be negotiated, it appears Stein`s proposal will meet our long-term needs,`` said Craig Gipple, AT&T vice president.

One major negotiating point will be the equity stake AT&T will acquire in the project in return for its lease, which sources have put at 50 to 90 percent.

Richard Stein, chairman of Stein & Co., said: ``I`m ecstatic. Having AT&T as a major tenant goes a long way toward ensuring the success of our project.``

The north tower of AT&T Corporate Center will replace a parking garage owned by the University of Chicago. The south tower will replace an office building of 16 stories and 326,659 square feet owned by M&J Wilkow Ltd. at 222 W. Adams St. Stein has contracts to buy both properties.

AT&T Communications, the long-distance unit of AT&T, now occupies 400,000 square feet at 1 S. Wacker Dr. and 200,000 square feet in the Gateway IV building at 300 S. Riverside Plaza, according to a spokesman.

The two divisions have an additional 120,000 square feet in a number of smaller offices around the Loop.

Stein has emerged in recent months as a major force in downtown Chicago. He is wrapping up the North Loop Redevelopment`s first private undertaking, a 27-story, $110 million office, retail and parking structure at 203 N. LaSalle St.

Earlier this summer, a partnership involving Stein, Elzie Higginbottom and the realty brokerage firm of Baird & Warner bid $16.9 million for the North Loop site bounded by Wacker Drive and Clark, Lake and Dearborn Streets.